Maxine Waters to take aim at Wells Fargo and Deutsche Bank as new head of House Financial Services Committee
Rep. Maxine Waters plans to zero in on two big banks — Wells Fargo & Co. and Deutsche Bank — when she becomes head of the powerful House Financial Services Committee.
The Los Angeles congresswoman, now the committee’s top Democrat, is widely expected to gain the gavel after her party won control of the House in last week’s elections. While Waters has outlined a wide-ranging agenda, she said her focus on bank oversight will target two large institutions she has been tangling with for a while — including one, Deutsche Bank, that spills into her bitter feud with President Trump.
“With Trump in the White House, I know that our fight for America’s consumers and investors will continue to be challenging. But I am more than up to that fight,” Waters wrote in a letter last week to her Democratic colleagues on the committee that was obtained by The Times.
Wells Fargo and Deutsche Bank, the large German financial institution that has had a long relationship with Trump, were the only two banks specifically mentioned in the eight-page letter, which was first reported by Bloomberg.
Waters told The Times that looking into the continued problems at Wells Fargo would be a priority, declaring that “something is terribly wrong” at the San Francisco bank.
“We’re not just focusing our attention on Wells Fargo because we’re focusing our attention on big banks,” she said. “We’re focusing our attention on Wells Fargo because Wells Fargo has emerged with the kind of problems that lead everyone to wonder what is going on over there.”
Waters said she anticipated meeting with the bank’s chief executive, Timothy Sloan, to discuss the bank’s various controversies. After that, hearings are possible, she said.
Waters had pushed Rep. Jeb Hensarling (R-Texas), the outgoing House Financial Services Committee chairman, to hold a hearing on Wells Fargo’s unauthorized account scandal in September 2016 after the bank agreed to pay $185 million to settle investigations into the matter by Los Angeles City Atty. Mike Feuer, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.
Wells Fargo’s sales practices were first reported by the Los Angeles Times in 2013.
At the hearing, Waters told then-Chief Executive John Stumpf that she believed the bank was too big to manage and called for it to be broken up. Additional controversies have hit Wells Fargo since then, including consumer abuses involving its mortgage and auto-loan businesses that drew a record $1-billion fine from federal regulators in April. Earlier in the year, the Federal Reserve had ordered the bank to stop growing until it could prove to regulators that it has systems in place to prevent consumer abuses.
Last year, Waters introduced legislation that would allow regulators to break up big banks that “repeatedly harm consumers.” In her Friday letter to committee Democrats, she cited Wells Fargo as an example of the “recidivist financial institutions” that would be punished under the bill.
Wells Fargo said Monday that it “remains committed to working with lawmakers on both sides of the aisle, including Congresswoman Waters.”
“Our priority is to continue sharing the progress that we have made to transform our company, make things right with customers, and give back to our communities,” said spokeswoman Jennifer Dunn.
Jaret Seiberg, an analyst with brokerage and investment bank Cowen & Co., said he expected Waters to hold hearings with top Wells Fargo executives, brightening the spotlight on its troubles.
“This will be a continued distraction for the bank and may make it difficult for regulators to roll back restrictions on the banks, including the Federal Reserve’s cap on the bank’s asset size,” he wrote in a research note Monday.
Waters has been one of Trump’s fiercest critics, refusing to attend his inauguration and publicly calling for his impeachment. He has responded by frequently deriding her on Twitter and at rallies as “crazy” and “low IQ.”
Waters has said her agenda “cannot be totally focused on the president or anybody.” And in her letter to colleagues, Waters outlined a host of priorities, including protecting consumers from abusive financial practices, expanding affordable housing opportunities, combating homelessness and strengthening the housing finance system.
But Waters also told her colleagues she planned to look into Trump’s finances.
“I am committed to strong oversight and following the Trump money trail, starting with Deutsche Bank,” she wrote.
Waters has tried for months to get Hensarling to subpoena documents from Deutsche Bank about Russian money laundering and the finances of Trump and his family.
Deutsche Bank was one of the few banks that lent money to Trump after bankruptcies by some of his companies. In 2017, the bank paid about $630 million in fines to U.S. and British regulators for failing to prevent trades that allowed the transfer of about $10 billion out of Russia in violation of anti-money laundering laws.
Waters told her colleagues she wanted to see any suspicious activity reports the bank filed with the Treasury Department’s Financial Crimes Enforcement Network. In the Times interview, she said she would continue to press Deutsche Bank and the Treasury Department for the confidential records. Asked if she was prepared to issue subpoenas, Waters said, “I think it’s premature to talk about what we anticipate doing.”
Deutsche Bank said it would cooperate.
“Deutsche Bank takes its legal obligations seriously and remains committed to cooperating with authorized investigations,” said spokesman Troy D. Gravitt. “Our recent record of cooperating with such investigations has been widely recognized by regulators. We intend to keep working in this spirit if we get an authorized request for information.”